Mumbai, Nov 4 The rupee stayed firm for the second straight session to settle 29 paise higher at 94.46 against the US dollar on Wednesday, supported by easing crude oil prices, a weak greenback and capital inflows from overseas investors.
Positive domestic equities market also favoured the local currency even as the outcome of the US midterm elections improved global sentiment, forex traders said.
In the interbank foreign exchange market, the rupee opened at 94.61 and hit a high of 94.46 and a low of 94.87 against the greenback. The unit finally settled at 94.46, up 29 paise from its previous closing level.
On Tuesday, the domestic currency rose 9 paise to close at 94.75 against the US dollar.
“The US midterm outcome improved global sentiment, raising expectations of a more measured approach to trade and tariff policies and potentially supporting FII flows into emerging markets,” said Vinod Nair, Head of Research, Geojit Investments Limited.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 101.18, lower by 0.53 per cent. US Treasury yields also declined amid expectations of a favourable outcome for the Democratic Party in the midterm elections.
According to Gaurav Garg, Head of Research at brokerage platform Lemonn, the Indian rupee gained support from a softer greenback following the US midterm election results.
“The outcome has prompted investors to reassess the possibility of changes in US fiscal priorities, government spending and the implementation of President Donald Trump’s policy agenda, contributing to weakness in the dollar and US Treasury yields.”
Also, Garg said that crude oil prices eased towards USD 103 per barrel, offering temporary relief to India’s energy import expenditure and inflation outlook.
“Going forward, traders should closely monitor US policy developments, foreign portfolio flows, crude oil movements and RBI currency management, with Rs 94.50-Rs 95 serving as the immediate USD/INR monitoring range,” he added.
Brent crude, the global oil benchmark, declined 0.73 per cent to USD 102.84 per barrel in futures trade even as geopolitical uncertainties continued.
On the domestic equity market front, Sensex rose 383.55 points, or 0.50 per cent, to settle at 77,301.40, while the Nifty jumped 149.75 points or 0.63 per cent to 23,960.60. Both indices ended over 1.5 per cent higher in the preceding session.
Foreign Institutional Investors (FIIs) remained net buyers on Wednesday, purchasing equities worth Rs 7,284.03 crore, according to exchange data.
(PTI News)
